The impact of changes in psychiatric bed supply on jail use by persons with severe mental illness.

There is an on-going concern that reductions in psychiatric inpatient bed capacity beyond a critical threshold will further exacerbate the incarceration of persons with mental illness. However, research to date to assess the proposed relationship between inpatient bed capacity and jail use has been limited in several ways. In addition, mechanisms through which changes in psychiatric bed capacity may affect jail use by persons with mental illness remain unexamined empirically. The aim of this study is to test whether changes in inpatient psychiatric resources, measured by per-capita psychiatric beds, inversely affect the likelihood of jail use by persons with severe mental illness. We also examine mechanisms that link psychiatric bed supply and jail detention. We analyze unique individual-level panel data on 41,236 adults in King County, Washington who were users of jails, the public mental health system, or the Medicaid program from 1993 to 1998. Using administrative records, we identify persons ever diagnosed with severe mental illness during the study period. Our analyses build upon a system of simultaneous equations that captures mechanisms from changes in psychiatric bed supply to jail detention. We estimate a reduced-form model and calculate the total effect of a shift in psychiatric bed supply on the likelihood of jail use by persons with severe mental illness. We also estimate a semi-reduced-form equation to examine whether changes in mental health and substance use mediate the relationship between bed supply and jail detention. We estimate linear probability models with person-level fixed effects to control for individual heterogeneity. Standard errors are adjusted for intra-cluster correlations. When an equation includes an endogenous variable, we calculate generalized method of moments estimators with instrumental variables. A decrease in the supply of psychiatric hospital beds is significantly associated with a greater probability of jail detention for minor charges among persons diagnosed with severe mental illness. Substance use appears to mediate this relationship. A reduction of inpatient psychiatric beds, ceteris paribus, is associated with an increase in jail detention among persons with severe mental illness via substance use problems. Further research should examine whether the magnitude of this relationship is greater for persons who have severe mental illness but are unable to obtain necessary treatment. This study further confirms an identified relationship between the supply of inpatient psychiatric beds, substance use and jail detention among persons with severe mental illness. These important relationships should be incorporated in the policy planning process, especially at the time of psychiatric inpatient bed reductions.